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How the left prospers from prosperity

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  • Markussen, Simen

Abstract

This paper investigates the relationship between fluctuations in economic growth, unemployment, and voting along a left-right axis. I estimate a model that explains how political fluctuations are caused by economic fluctuations in the OECD countries. I find that higher economic growth causes a shift to the left of policy sentiments. I hold the provision of social insurance by the welfare state to be the key to understanding this relationship. I also find that the relationship changes over the sample period. I hold the tax increase needed to finance the expansion of the welfare state to be the reason for this.

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  • Markussen, Simen, 2008. "How the left prospers from prosperity," European Journal of Political Economy, Elsevier, vol. 24(2), pages 329-342, June.
    • Handle: RePEc:eee:poleco:v:24:y:2008:i:2:p:329-342
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    1. William D. Nordhaus, 1989. "Alternative Approaches to the Political Business Cycle," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 20(2), pages 1-68.
    2. Jo Thori Lind, 2010. "Do the Rich Vote Conservative Because They Are Rich?," Review of Economics and Institutions, Università di Perugia, vol. 1(2).
    3. Meltzer, Allan H & Richard, Scott F, 1981. "A Rational Theory of the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 914-927, October.
    4. Durr, Robert H., 1993. "What Moves Policy Sentiment?," American Political Science Review, Cambridge University Press, vol. 87(1), pages 158-170, March.
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    Cited by:

    1. Olivier Jacques & David Weisstanner, 2022. "The Micro-Foundations of Permanent Austerity: Income Stagnation and the Decline of Taxability in Advanced Democracies," LIS Working papers 839, LIS Cross-National Data Center in Luxembourg.
    2. François Facchini & Mickael Melki, 2014. "Political Ideology And Economic Growth: Evidence From The French Democracy," Economic Inquiry, Western Economic Association International, vol. 52(4), pages 1408-1426, October.
    3. Shino Takayama & Yuki Tamura & Terence Yeo, 2019. "Primaries, Strategic Voters and Heterogenous Valences," Discussion Papers Series 605, School of Economics, University of Queensland, Australia.
    4. Elinder, Mikael, 2010. "Local economies and general elections: The influence of municipal and regional economic conditions on voting in Sweden 1985-2002," European Journal of Political Economy, Elsevier, vol. 26(2), pages 279-292, June.
    5. François Facchini & Mickaël Melki, 2012. "Political Ideology and Economic Growth in a Democracy: The French Experience, 1871 - 2009," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00662838, HAL.
    6. Saptarshi Ghosh & Nidhi Jain & Cesar Martinelli & Jaideep Roy, 2019. "Swings, News, and Elections," Working Papers 1076, George Mason University, Interdisciplinary Center for Economic Science.
    7. Niklas Potrafke, 2012. "Political cycles and economic performance in OECD countries: empirical evidence from 1951–2006," Public Choice, Springer, vol. 150(1), pages 155-179, January.
    8. François Facchini & Mickaël Melki, 2012. "Political Ideology and Economic Growth in a Democracy: The French Experience, 1871 - 2009," Post-Print halshs-00662838, HAL.
    9. Ostad, Parastoo & Mella, Javier, 2023. "The value relevance of corporate tax expenses in the presence of partisanship: International evidence," Global Finance Journal, Elsevier, vol. 57(C).
    10. Artés, Joaquín, 2014. "The rain in Spain: Turnout and partisan voting in Spanish elections," European Journal of Political Economy, Elsevier, vol. 34(C), pages 126-141.
    11. Hillman, Arye L., 2010. "Expressive behavior in economics and politics," European Journal of Political Economy, Elsevier, vol. 26(4), pages 403-418, December.
    12. Osterloh, Steffen & Debus, Marc, 2012. "Partisan politics in corporate taxation," European Journal of Political Economy, Elsevier, vol. 28(2), pages 192-207.
    13. David Weisstanner, 2020. "Income Growth and Preferences for Redistribution: The Role of Absolute and Relative Economic Experiences," LIS Working papers 782, LIS Cross-National Data Center in Luxembourg.
    14. François Facchini & Mickaël Melki, 2012. "Political Ideology and Economic Growth in a Democracy: The French Experience, 1871 - 2009," Documents de travail du Centre d'Economie de la Sorbonne 12003, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    15. Martin Ravallion, 2013. "The Idea of Antipoverty Policy," NBER Working Papers 19210, National Bureau of Economic Research, Inc.

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